Just do nothing

Economists like to complain that politicians are constantly asking them about things that they can’t really explain: where is the Dax at the end of the year? Will the inflation rate be 10.1 or 10.2 percent? With such forecasts, economics moves on similarly uncertain terrain as a meteorologist who is supposed to predict the amount of precipitation for an April day on Amrum weeks in advance.

Conversely, there are areas in which there is very reliable economic knowledge, but which hardly anyone asks about in practice. These areas include, for example, foreign trade policy. There is little scientific doubt that a national subsidy program that only promotes domestic manufacturers and excludes all others destroys prosperity. And science also has a lot to say about the right answer to such a program.